BEIJING -- New-vehicle sales in China may skid to 26 million this year, a drop of around 8 percent, a senior industry executive warned, as the world's largest auto market braces for a second year of contraction amid slowing economic growth and tighter vehicle emissions standards.
The latest prediction, by Fu Bingfeng, executive vice chairman of the China Association of Automobile Manufacturers, is lower than the group's previous forecast for a 5 percent drop, issued in July.
Amid gathering gloom over the global auto industry's biggest growth story of the last 20 years, companies such as General Motors, Ford and Peugeot have all reported double-digit percentage sales declines. Some smaller automakers have even started to idle capacity, close plants and consolidate with other companies.
"For this year, we now expect to see if we can hold on to (sales of) 26 million vehicles," Fu said Wednesday, speaking on the sidelines of a Singapore forum led by the China Center for International Economic Exchange.
Fu said the decline in sales should be viewed as part of the industry's transformation toward higher production standards, lower-emissions vehicles and new energy vehicles, adding the association was still ultimately bullish about the future prospects of the market.
Around 28 million light vehicles were sold in China in 2018, down 3 percent from a year earlier, the first sales drop since the 1990s. Monthly sales dropped in September, marking the 15th consecutive decline.
A spokesman for CAAM in Beijing confirmed on Thursday the industry group expects an 8 percent decline in sales from the previous year, without disclosing further details.
Fu said China's auto sales are still on track to hit 30 million by 2023 with further headroom, he said.
"40 million units a year cannot be the rooftop of China's car market," Fu said.
Still, amid the current downturn, Japan's Suzuki Motor Corp. became the first big foreign car manufacturer to exit the country.
The sales slump has even extended to the NEV sector, due to subsidy cuts. NEV sales skidded 34 percent in September following a 16 percent decline in August.
"The development of new energy vehicles is still at early stage, so talking about its growth now is not very meaningful," Fu said.